8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): May 9, 2017

PATRIOT NATIONAL BANCORP, INC.

(Exact Name of Registrant as Specified in Charter)

Connecticut	000-29599	06-1559137
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

900 Bedford Street, Stamford, Connecticut 06901

(Address of Principal Executive Offices) (Zip Code)

(203) 324-7500

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

Item 2.02 Results of Operations and Financial Condition.

On May 9, 2017, Patriot National Bancorp, Inc. issued a press release, a copy of which is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is hereby incorporated by reference, announcing its financial results for its first quarter ended March 31, 2017.

ITEM 9.01.  Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release dated May 9, 2017 of Patriot National Bancorp, Inc. announcing its financial results for the first quarter ended March 31, 2017.

This Current Report on Form 8-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve uncertainties and risks. Forward-looking statements include statements, without limitation, regarding plans for share repurchases. When used in this press release, words such as “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” “may” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon Patriot’s expectations at the time it makes them and various assumptions. Patriot’s expectations, beliefs and projections are expressed in good faith, and it believes there is a reasonable basis for them. However, there can be no assurance that Patriot’s plans will be achieved. Factors that could cause changes to Patriot’s plans include risks described under the heading “Item 1A Risk Factors” in Patriot’s most recent Form 10-K and in Patriot’s other filings with the Securities and Exchange Commission. Patriot is under no duty to update any of the forward-looking statements to conform such statements to actual results or events and does not intend to do so.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PATRIOT NATIONAL BANCORP, INC.
Date: May 9, 2017	By:	/s/ Richard Muskus
		Name: Richard Muskus
		Title: President

EX-99.1

Exhibit 99.1

Contact:
Patriot Bank, N.A.	Michael Carrazza
900 Bedford Street	CEO & Chairman
Stamford, CT 06901	203-251-8230
www.BankPatriot.com

Patriot Bank Earnings Soar 165% in Q1

Deposits Up 32% & Loans Up 30% Year-Over-Year

STAMFORD, CT – May 9, 2017 (GLOBE NEWSWIRE) – Patriot National Bancorp, Inc. (“Patriot”, “Bancorp”) (NASDAQ: PNBK), the parent company of Patriot Bank, N.A. (the “Bank”), today announced its third consecutive quarter of powerful earnings momentum. Patriot reports first quarter net income of $1,730,000, or $0.44 per diluted share, a towering 165% increase over a year ago. Also, at the end of 2016, Patriot surpassed the three quarters of a billion dollar milestone and continued to demonstrate growth in the first quarter.

First quarter earnings also increased over the prior quarter by 66%. For comparison to prior quarterly periods, the third quarter of 2016 saw $814,000 in net income, or $0.21 per diluted share, while in the fourth quarter Patriot reported $1,045,000 in net income, or $0.27 per share. The current quarter results include the impact of a substantial recovery of a loan that was charged-off last year.

As of March 31, 2017, total assets increased to $775 million, as compared to $757 million at December 31, 2016 and $636 million at March 31, 2016. Net loans totaled $625 million, up 8% over $577 million as of December 31, 2016, and up 30% over $480 million at March 31, 2016.

Deposits grew 6%, or $32 million, to $561 million at March 31, 2017 as compared to $529 million at December 31, 2016 and $424 million at March 31 2016. Deposit growth remains a key initiative to keep pace with Patriot’s overall growth prospects. Patriot has seen total deposits grow an aggregate of 32% over the last year.

CEO Michael Carrazza stated: “Patriot’s recent jump in performance is a direct result of performance enhancing strategies that we designed and began implementing in the third quarter 2016. The amalgamation of broad-based operational improvements, management changes, asset-class repositioning, and balance sheet reengineering are producing these very positive results, and they remain ongoing. Tackled in this quarter was the successful recovery of a charged-off loan that had been paralyzed in a protracted legal process. Our initiatives support a steady, predictable earnings trend, and our increasing scale will further drive efficiencies.”

Mr. Carrazza took operational control of Patriot as interim CEO in August 2016 to execute a series of value-enhancing strategies and to reposition the executive team. The performance in the past three quarters reflects a keenly focused and regimented effort to drive profitability and shareholder value.

“Patriot’s banking platform is on a solid earnings trajectory, which improves each day. Shareholders should benefit from increasing scale, profitability and strategic activities that are intently underway,” added Mr. Carrazza.

The loan pipeline remains strong and continued growth is expected. Patriot’s net interest margin was 3.50% for the first quarter, as compared to 3.75% in the prior quarter and 3.76% in the first quarter of 2016. Net interest income decreased by $343,000, or 6%, as compared to the 4th quarter of 2016, and increased by $109,000, or 2%, compared to the 1^st quarter of 2016.

The decline from the fourth quarter reflects the full quarter impact of interest paid on long-term senior debt issued in December of 2016 and also reflects a timing mis-match between loan attrition early in the quarter and new loans that closed late in the quarter.

The provision for loan losses in the quarter was a net credit of $1,749,000, reflecting the previously noted recovery, partially offset by a $1.1 million addition to the Allowance for Loan Loss to reflect the growth in the end of period loan balance. The provision for loan losses was $150,000 in the 4^th quarter of 2016 and zero in the 1^st quarter of 2016.

Non-interest income decreased by $91,000 or 25%, over last quarter and $133,000, or 32%, below the same period last year. Both comparisons were impacted by a loss of $78,000 recognized on the sale of investment portfolio securities, as the portfolio was intentionally re-positioned to provide future enhancements to profitability.

Non-interest expense increased $280,000, or 6%, over last quarter and declined by $70,000, or 1% compared to the 1^st quarter of 2016.

As of March 31, 2017 shareholders’ equity was $64.4 million, an increase of $1.8 million over December 31, 2016, at $62.6 million. This was a direct result of the reported net income of the first quarter of 2017. The Company’s book value per share increased to $16.55 at March 31, 2017 as compared to $16.08 at December 31, 2016 and $15.75 at March 31, 2016.

The Bank’s capital ratios continue to be strong, as the Bank maintained its “well capitalized” regulatory status. As of March 31, 2017 Tier 1 leverage ratio was 10.65%, Tier 1 risk based capital was 11.09% and total risk based capital was 11.96%.

* * * * *

About the Company

Patriot National Bancorp, Inc. is headquartered in Stamford, Connecticut and the Bank has full service branches in Connecticut and New York.

Since opening its doors in 1994, the Company’s mission has been to serve our local communities by helping our neighbors and neighborhood businesses thrive. All lending is handled locally and is specific to each borrower, and the commitment to local businesses goes further to connect, support and grow businesses in both the for-profit and nonprofit sectors, along with municipalities. Patriot believes a well-connected community is a strong community—and that together, all will prosper.

“Safe Harbor” Statement Under Private Securities Litigation Reform Act of 1995

Certain statements contained in Bancorp’s public statements, including this one, may be forward looking and subject to a variety of risks and uncertainties. These factors include, but are not limited to, (1) changes in prevailing interest rates which would affect the interest earned on Bancorp’s interest earning assets and the interest paid on its interest bearing liabilities, (2) the timing of repricing of Bancorp’s interest earning assets and interest bearing liabilities, (3) the effect of changes in governmental monetary policy, (4) the components of Bancorp’s periodic earnings and assets, (5) the fact that certain of the income recognized by Bancorp in any quarter may not be repeated in future periods, (6) the effect of changes in regulations applicable to Bancorp and the Bank and the conduct of its business, (7) changes in competition among financial service companies, including possible further encroachment of non-banks on services traditionally provided by banks, (8) the ability of competitors that are larger than Bancorp to provide products and services which it is impracticable for Bancorp to provide, (9) the state of the economy and real estate values in Bancorp’s market areas, and the consequent effect on the quality of Bancorp’s loans, (10) recent governmental initiatives that are expected to have a profound effect on the financial services industry and could dramatically change the competitive environment of the Company, (11) other legislative or regulatory changes, including those related to residential mortgages, changes in accounting standards, and Federal Deposit Insurance Corporation (“FDIC”) premiums that may

adversely affect the Company, (12) the application of generally accepted accounting principles, consistently applied, (13) the fact that one period of reported results may not be indicative of future periods, (14) the state of the economy in the greater New York metropolitan area and its particular effect on the Company’s customers, vendors and communities and other such factors, including risk factors, as may be described in Bancorp’s other filings with the SEC.

PATRIOT NATIONAL BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

Dollars in thousands

	Mar 31, 2017			Dec 31, 2016			Mar 31, 2016
Assets
Noninterest bearing deposits and cash	$	5,086		$	2,596		$	2,931
Interest bearing deposits		55,180			89,693			64,075
Total cash and cash equivalents		60,266			92,289			67,006
Securities-available for sale		21,201			24,428			28,735
Other investments		4,450			4,450			4,450
Total investment securities		25,651			28,878			33,185
FRB & FHLB stock		7,847			7,718			8,669
Gross loans		630,727			581,657			485,183
Allowance for loan losses		(5,697	)		(4,675	)		(5,247	)
Net loans		625,030			576,982			479,936
Accrued interest and dividends receivable		3,063			2,726			2,075
Premises and equipment, net		33,442			32,759			29,790
Other real estate owned		851			851			—
Deferred tax asset, net		11,691			12,632			13,354
Other assets		6,921			1,819			1,566
Total Assets	$	774,762		$	756,654		$	635,581
Liabilities and Shareholders’ Equity
Deposits
Noninterest bearing deposits	$	78,372		$	76,772		$	80,594
Interest bearing deposits		482,587			452,552			343,361
		560,959			529,324			423,955
FHLB advances		124,000			123,000			134,900
Other short term borrowings		—			15,000			—
Note Payable - long term senior debt		11,647			11,628			—
Subordinated debt		8,080			8,079			8,074
Note Payable		1,722			1,769			1,908
Mortgage escrow deposits		1,755			2,676			1,666
Accrued expenses and other liabilities		2,156			2,608			2,771
Total Liabilities		710,319			694,084			573,275
Common stock		40			40			40
Treasury stock		(1,177	)		(1,177	)		(160	)
Additional paid-in capital		106,773			106,729			106,722
Accumulated deficit		(41,172	)		(42,902	)		(44,178	)
Accumulated other comprehensive loss		(21	)		(120	)		(117	)
Total Shareholders’ Equity		64,443			62,570			62,306
Total Liabilities and Shareholders’ Equity	$	774,762		$	756,654		$	635,581

PATRIOT NATIONAL BANCORP, INC.

STATEMENTS OF OPERATIONS

(Unaudited)

Dollars in thousands, except per share data

	Three Months Ended
	Mar 31, 2017			Dec 31, 2016		Mar 31, 2016
Interest and dividend income
Interest and fees on loans	$	6,607		$	6,579	$	5,840
Interest on investment securities		171			140		142
Dividends on investment securities		82			90		86
Other interest income		64			25		41
Total interest and dividend income		6,924			6,834		6,109
Interest expense
Interest on deposits		989			724		473
Interest on Federal Home Loan Bank borrowings		78			113		121
Interest on Note Payable - long term senior debt		229			25		—
Interest on subordinated debt		85			84		82
Interest on other borrowings		9			11		8
Total interest expense		1,390			957		684
Net interest income		5,534			5,877		5,425
(Credit) provision for loan losses		(1,749	)		150		—
Net interest income after (credit) provision for loan losses		7,283			5,727		5,425
Non-interest income
Loan application, inspection and processing fees		21			28		67
Fees and service charges		149			149		151
Rental Income		94			103		103
Loss on sale of investment securities		(78	)		—		—
Other income		91			88		89
Total non-interest income		277			368		410
Non-interest expense
Salaries and benefits		2,430			2,155		2,550
Occupancy and equipment expense		775			797		780
Data processing		120			125		285
Professional services and other outside services		652			565		409
Advertising and promotional expenses		74			53		117
Loan administration and processing expenses		9			24		8
Regulatory assessments		179			151		147
Insurance expense		59			54		55
Material and communications		87			88		93
Other operating expenses		309			402		320
Total non-interest expense		4,694			4,414		4,765
Income before income taxes		2,866			1,681		1,070
Expense for Income taxes		1,136			636		418
Net income	$	1,730		$	1,045	$	651
Basic income per share	$	0.44		$	0.27	$	0.17
Diluted income per share	$	0.44		$	0.27	$	0.16

PATRIOT NATIONAL BANCORP, INC.

FINANCIAL RATIOS AND OTHER DATA

(Unaudited)

Dollars in thousands, except per share data

	Mar 31, 2017			Dec 31, 2016			Mar 31, 2016
Asset Quality:
Nonaccrual loans	$	1,812		$	1,821		$	5,409
Other real estate owned		851			851			—
Total nonperforming assets	$	2,663		$	2,672		$	5,409
Nonaccrual loans / loans		0.29	%		0.31	%		1.11	%
Nonperforming assets / assets		0.34	%		0.35	%		0.85	%
Allowance for loan losses	$	5,697		$	4,675		$	5,247
Allowance for loan losses / loans		0.90	%		0.80	%		1.08	%
Allowance / nonaccrual loans		314.4	%		256.7	%		97.0	%
Gross loan charge-offs for the quarter	$	—		$	2,935		$	5
Gross loan (recoveries) for the quarter	$	(2,771	)	$	(132	)	$	(10	)
Net loan charge-offs (recoveries) for the quarter	$	(2,771	)	$	2,803		$	(6	)
Capital Data:
Book value per share (1)	$	16.55		$	16.08		$	15.75
Shares outstanding		3,894,128			3,891,897			3,956,207

(1) Book value per share represents shareholders’ equity divided by outstanding shares.